Cepheid (NASDAQ: CPHD) and Sequenom (NASDAQ:SQNM) are both healthcare companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current recommendations and price targets for Cepheid and Sequenom, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cepheid 0 9 0 0 2.00
Sequenom 0 0 0 0 N/A

Cepheid presently has a consensus target price of $52.67, suggesting a potential downside of 0.54%. Given Cepheid’s higher probable upside, equities research analysts clearly believe Cepheid is more favorable than Sequenom.

Earnings and Valuation

This table compares Cepheid and Sequenom’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cepheid N/A N/A N/A ($0.69) -76.74
Sequenom N/A N/A N/A ($0.34) -7.03

Cepheid is trading at a lower price-to-earnings ratio than Sequenom, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

95.8% of Cepheid shares are owned by institutional investors. Comparatively, 46.0% of Sequenom shares are owned by institutional investors. 4.2% of Cepheid shares are owned by insiders. Comparatively, 3.1% of Sequenom shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Cepheid has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Sequenom has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Profitability

This table compares Cepheid and Sequenom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cepheid -6.88% -11.54% -5.18%
Sequenom -21.54% N/A -25.05%

Summary

Cepheid beats Sequenom on 5 of the 8 factors compared between the two stocks.

About Cepheid

Cepheid is a molecular diagnostics company. The Company develops, manufactures and markets fully-integrated systems for testing in the Clinical and Non-Clinical markets. The Company’s systems enable molecular testing for organisms and genetic-based diseases by automating otherwise complex manual laboratory procedures. The Company’s systems integrate these steps and analyze biological samples in test cartridges. Its primary offering is the GeneXpert system, which integrates sample preparation in addition to Deoxyribonucleic acid (DNA) amplification and detection. The GeneXpert system is designed for a range of user types ranging from reference laboratories and hospital central laboratories to satellite testing locations, such as emergency departments and intensive care units within hospitals, as well as physician offices and other alternate site laboratories. It also offers the SmartCycler system, which integrates DNA amplification and detection to allow rapid analysis of a sample.

About Sequenom

Sequenom, Inc. is a life sciences company. The Company serves patients and physicians by providing early patient management information. The Company operates through Sequenom Laboratories segment. It conducts its business as a molecular diagnostics clinical laboratory located in San Diego, California and Raleigh-Durham, North Carolina. Its testing focus is on prenatal health that includes molecular-based laboratory developed tests (LDTs). The Company’s diagnostic services are provided through its subsidiary, Sequenom Center for Molecular Medicine LLC (SCMM), doing business as Sequenom Laboratories. Sequenom Laboratories develops and validates its tests to be used as a testing service to physicians. Sequenom Laboratories is focused on developing and offering a menu of tests for prenatal continuum of care. The Sequenom Laboratories’ test offerings in the prenatal market include MaterniT21 PLUS LDT, HerediT CF test, SensiGene RhD test, VisibiliT test and Test Send-out Agreements.

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